Dr. Norman E. Sharpless was named as the acting commissioner of the Food and Drug Administration Tuesday and his appointment caused a move lower in tobacco stocks.
Sharpless comes from the National Cancer Institute, where he was sworn in as the 15th director of the institute in late 2017. Sharpless' interim appointment could result in adversarial legislation for cancer-causing products like cigarettes and e-cigarettes.
Philip Morris (PM - Get Report) shares were down 0.3% following the news, dropping sharply on the news after spending most of the day in the green. Altria Group (MO - Get Report) shares fell 0.35% after spending most of the session in positive territory.
British American Tobacco (BTI) experienced a similar dip, but the stock remained up 0.3%.
Sharpless already has a rapport with FDA staff through his weekly participation with the agency's basketball team, according to a staff memo written by outgoing FDA Commission Scott Gottlieb that was obtained by Stat News. The news service reported that Sharpless was an enthusiastic supporter of Gottlieb's efforts toincrease tobacco and e-cigarette legislation.
Gottleib announced his resignation last week. Gottlieb had been a vocal critic of the vaping industry's influence on teen users.
Gottlieb, 46, served as FDA commissioner since 2017, after having served as a clinical assistant professor at the New York University School of Medicine. The FDA chief gave his notice just one day after he put 12 U.S. retail chains "on notice" for allegedly doing little to halt the sale of tobacco products to minors.
"Retailers are on the frontlines of these efforts to reduce the health consequences of tobacco use and nicotine dependence," Gottlieb said in a statement. "Walgreens and other retail chains, should take seriously not only their legal obligations, but also the substantial public health importance of preventing tobacco product sales to minors at their stores."